Disclosures&Disclaimer:ThisreportmustbereadwiththedisclosuresandtheanalystcertificationsintheDisclosureappendix,andwiththeDisclaimer,whichformspartofit.Whenwillthelabourcycleend?Inmostcyclesinthe70yearssinceBrettonWoods,slowdownshavebecomerecessionsintheUSandtheninEurope.TheimportanceoftheServicesectorhasgrown,andtheimportanceofmanufacturinghasdeclined.InGermanythepercentageoftheworkforceemployedinmanufacturinghasfallenfrom39.5%in1970to17%currently.Thereisamanufacturingslowdown,butisitworsethanthat?Wecanseefromemploymentdata,widesentimentindicatorsandcapgoodsresultsthatthereisaslowdowninthemanufacturingsector.HistoricalprecedentsuggeststhatforthistobecomearecessionitneedstoworsenintheUSandimpacttheservicesector.IfwelookatthelabourdatathecurrentweaknessseemslargelyconfinedtothemanufacturingsectorandtobelesspronouncedintheUS.ItispossiblethattheBrettonWoodseraiscomingtoanend,redefinedbynewtradepolicies.OnedaytheUSeconomymaynolongerbethekeyrecessionbarometer,butfornowweassumeitremainsourbestguide.Jobvacancygrowthinevitablyslowsasacycleprogressesandthisseemslittledifferentbutwedonotseethesharpfallsonewouldassociatewithrecession.Neitherdoweseethesharpdeclinesinjobtypesthatflagmarginaldemand.Temps,truckdriversandemploymentagencieshaveconsistentlyflaggedearlyanydeteriorationinlabourdemand.Theyremainstable.Europeantempdemandispoorinvolumetermsbutnotnecessarilyasbadinvalueterms.Supplyand/ordemandAlthoughthereisaclearweaknessinEuropeandemandformanufacturinglabour,itseemsthereisaglobalsupplysqueeze,leadingtosomewageinflation.IntheUS,tempwageinflationis8.0%andjobswitchersunder25yearsoldareseeing5.5%wageinflation.InEurope,Dutchtempsareseeing4.0%wageinflationandlargelybluecollarFrenchones2.5%.Thereisclearlysomedemand.Volumegrowthisweakerinthelabourmarketsbutitisamixedpicturewithskillssupplytheissueinsomesectorsandinothersitisdemand.Findingthecorrectstaffincreasinglymeanspayingup.SummerblackspotThereisonekeycaveat,however:weareabouttogointotheNorthernHemispheresummerlull.Julyand...
